2025
market vibes
January 17 … )
"I believe that President Trump has a generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans. If we do not renew and extend [the Trump tax cuts], then we will be facing an economic calamity, and as always, with financial instability that falls on the middle and working class." Scott Bessent yesterday at the Senate
In the news this morning:
China’s population shrank for the third straight year in 2024, dropping by over 1.39 million to 1.408 billion. While births increased slightly, it was still the second lowest number since 1949, underscoring long-term risks for the economy, according to BBG.
Michael Pollan’s truth bomb The Omnivore’s Dilemma was published in April 2006. If you haven’t read it, allow me to suggest you do with my highest recommendation.
It’s easy to dismiss tell-alls and narratives about the things we do every day that are obviously bad for us. RFK Jr.’s mission is to improve them. I think he will. Pollan’s very human approach to these issues made a dent among thinking readers nearly 20 years ago, but not the system. However, a few lines stayed with me as a trader and investor. Stocks don't go up based on innovation and productivity, they go up because population goes up and because there are more people, demand goes up, therefore earnings go up.
Although Thomas Malthus didn’t discuss stock markets in 1798, his theories on population growth laid the groundwork for Michael Pollan’s ideas. One of the earliest economists to discuss how growing populations influence wealth was Karl Marx in "Das Kapital." John Maynard Keynes' theories argued that demand (influenced by population growth) drives economic activity, earnings, and stock prices. Greenspan and his successors were keenly aware of the relationship.
Malthus said, the population of any species will rise to the level to which it can feed itself. Growing populations of people readily solved that problem for 226 years. Systemic innovation to provide capital and manage population growth created stock markets, electricity, and technology. However, technology isn’t the reason for growth; it is an incidental symptom of it.
True, without technology, leverage would still be in the 19th century. We would still be on the gold standard. Birth rates make stocks go up.
Great chart (use the link to hit the time lapse)
One of the unspoken mysteries of our time is why our political leaders in America, Canada, Western and Eastern Europe, and Scandinavia would openly violate their constitutions and subject their citizens and culture to mass migration, crime, rape, and bigotry. Why? Let’s turn back the clock a few years and see what the past can tell us about the future.
